Industry Leaders Question Microsoft's Source Code Move

By Peter Galli  |  Print this article Print

The company's decision to placate the EC by licensing Windows Server source code fails to impress competitors, while some analysts say it goes too far.

Microsoft's decision to license all the Windows Server source code that applies to the antitrust requirements set out in the European Commission judgment against it has received a lukewarm response at best from competitors and trade groups.

"With today's announcement, Microsoft has supplemented the existing resources with a new license for all of the Windows Server source code that implements all of the communications protocols covered by the 2004 decision," Brad Smith, Microsoft senior vice president and general counsel, said in a statement released on Wednesday.

"Today we are putting our most valuable intellectual property on the table so we can put technical compliance issues to rest and move forward with a serious discussion about the substance of this case," Smith said.

Microsoft asks the United States to intervene in its struggle with the EU. Click here to read more.

"The Windows source code is the ultimate documentation of Windows Server technologies. With this step our goal is to resolve all questions about the sufficiency of our technical documentation," he said.

A reference license to the Windows Server source code will be made available and will provide software developers with "the most precise and authoritative description possible of the Windows protocol technologies. With it, software developers will be entitled to view the Windows source code in order to better understand how to develop products that interoperate with Windows, but not to copy Microsoft's source code," Smith said.

Microsoft will also provide source code for the Windows desktop operating system to better enable licensees under its U.S. settlement to build interoperable products, he said.

Microsoft has an existing protocol licensing program that was established in the United States pursuant to a consent decree there, covering certain protocols in the Windows desktop operating system.

"More than 20 companies have taken licenses to Microsoft's protocols under that program, and many are shipping products incorporating such protocols.

"To continue to foster consistency between both licensing programs, Microsoft has decided to make available for the desktop protocols the same reference license for source code it is offering for server protocols, and the company will provide competition authorities in the United States with information so they can consider the matter," Smith said.

He said Microsoft decided to do this so as to "address categorically all of the issues raised by the Commission's Dec. 22, 2005, Statement of Objections. That document asserted that Microsoft's prior technical documentation provided insufficient information to enable licensees to implement successfully certain Windows Server communications protocols," Smith said.

Read more here about how the European Commission rapped Microsoft over the knuckles for failing to comply with its antitrust order.

Competitors, like Novell, were initially unimpressed, and suspicious of the move. Novell spokesperson Bruce Lowry told eWEEK on Wednesday that the company needed to see the details on the license terms and the code covered by it before it could "assess whether this will help."

The European Commission said in a statement that it would carefully study Microsoft's announcement licensing some of its source code, but added that it still expected to receive, by Feb. 15, Microsoft's reply to its December Statement of Objections.

Next Page: Industry reaction to the licensing move.

Industry associations ACT (Association for Competitive Technology) and ATL (Americans for Technology Leadership) were critical of the move.

Jonathan Zuck, the president of ACT, said Microsoft had gone too far to placate its critics. "This decision could set dangerous precedents for intellectual property protections that affect all companies doing business in Europe," he said.

"It may only encourage the Commission to continue seeking remedies that force successful firms into compulsory licenses that limit incentives for innovation. This would have repercussions on small and medium entrepreneurial enterprises," Zuck said.

While ACT members include some household names like eBay, Orbitz and Microsoft, both it and the ATL have been accused of promoting a Microsoft-friendly agenda in relation to property rights and antitrust legislation.

Jim Prendergast, the executive director of ATL, agreed that the move creates a troubling precedent for American businesses across the globe. "Pressure to reveal critical intellectual property to competitors will have a chilling effect on innovation and take away the incentive for companies to create and improve their products," he said.

"It is consumers who will ultimately be harmed by the gradual undermining of the intellectual property protections that allow innovators to share their creative works with the public," Prendergast said.

By constantly pressuring Microsoft to go further in disclosing their IP (intellectual property) by threatening larger fines and more legal action, the Commission essentially held the company hostage and put it in a position where it was forced to surrender more of its valuable IP, even before a European Court has reviewed the merits of the Commission's original claims on appeal, Prendergast said.

"The losers of this hyper-regulation will be consumers, here, and throughout the world. Despite the fact that this announcement goes further than anyone would have imagined and beyond the scope of the case, we're certain that there will be radicals who say it's still not enough.

"Some elements will not be satisfied until government regulators have the ability to force every company to share all their intellectual property with anyone who wants to copy their work," he said.

Microsoft's Smith said that while the company is confident that it is currently in full compliance with the EC decision, "We wish to dispel any notion that Microsoft's technical documents are insufficient."

Server software developers who take a license under the new program will get access to the more than twelve thousand pages of technical documentation covering specifications for the communications protocols, which Microsoft had already created to cover the 2004 decision. They will also get additional technology going beyond those protocols, he said.

Check out eWEEK.com's for Microsoft and Windows news, views and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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